Construction cost worked out on weighted basis as property of ground and first floor were mainly sold

ITO Vs Aarya Realties Pvt. Ltd. (ITAT Ahmedabad)

ITAT Ahmedabad held that construction cost attributable to 5 offices out of total 11 offices should be worked out on weighted basis and not on average basis as the properties mainly of the ground floor and first floor were sold out. Such properties fetches higher value in terms of sale price and hence cost is also attributable on weighted basis.

Facts-

Assessee company was appointed as a developer and accordingly AO observed that 5 out of 11 offices were sold by the assessee during the year under consideration for a total consideration of Rs.6,20,79,312/-, including the share amount; whereas the remaining 6 offices had been sold by the assessee in the earlier years.

After allowing credit of Rs.30,53,668/- on account of excess sale consideration taken by the assessee for the remaining 6 properties, the profit earned by the assessee during the year under consideration was worked out by AO at Rs.2,63,59,170/-.

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